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The Government’s potential plan to split Royal Bank of Scotland into good and
bad banks could be blocked by institutional investors who would have a veto
on the transaction.

If ministers press ahead with a plan to take ownership of RBS’s problem loans
through the creation of a bad bank, it would be seen as a “related party”
transaction because the state owns 81 per cent of RBS, senior legal sources
believe. That would force RBS to allow its minority investors, who own 19
per cent of the bank, to vote on the deal. The Government would not be
allowed

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Oct/Nov 2008 £20bn is pumped into RBS; Stephen Hester is named chief executive
Jan 2009 Government increases stake in RBS to 82 per cent, bringing total taxpayer injection to £45.5bn
Feb 2009 RBS reports 2008 loss of £24.1bn
Feb 2013 RBS is fined $612m for its role in Libor manipulation June Mr Hester resigns; George Osborne commissions study into possible break-up into "good" and "bad" banks
Late 2014 /early 2015 Bad bank could be created